City Wins Partial Judgment Against SunCal

September 17th, 2012

On September 14th, US Northern District Court Judge Charles Bryer handed down a judgment dismissing SunCal’s claims of $17 million in a suit against the City of Alameda, filed after the city terminated a master developer negotiation agreement with the developer.

The City of Alameda announced today that United States District Court Judge Charles Breyer granted the city’s motion for partial summary judgment against SunCal, the developer that sued for $117 million in lost profits and out-of-pocket expenses.

The judgment dismisses SunCal’s claim for recovery of $17 million in out-of-pocket costs it incurred while it was the would-be master developer of Alameda Point. The City of Alameda terminated its negotiating agreement with SunCal in July 2010, and the developer followed up with the lawsuit.

The core of the dispute over the $17 million in out-of-pocket costs was whether or not the exclusive negotiating agreement between SunCal, as SCC Alameda Point, and the City of Alameda required the city to reimburse SunCal for development costs up to the termination date. The City of Alameda asserted that it was liable only for $1 million that the developer put down as a deposit when the agreement was signed.

In his 23-page judgment handed down last Friday, Judge Breyer wrote, “The evidence demonstrates that the original draft did not include explicit language allowing out-of-pocket costs, that the City clearly expressed their unwillingness to agree to inclusion of the recovery of such costs, and though SCC Alameda states they were unhappy and would not have signed a final version to this effect, they present no extrinsic evidence that demonstrates they introduced language that would clearly allow for such costs, or stated openly to the City that they thought the revisions to the contract allowed for such costs.”

The City of Alameda says that the judgment limits SunCal’s claim to the $1 million deposit.

That $1 million deposit now becomes the subject of a trial to determine if the city wrongfully terminated the agreement with SunCal.

The City of Alameda is represented by Newdorf Legal of San Francisco. The case is 3:10-cv-05178-CRB in the United States District Court for the Northern California District.